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Title: Joint inventory and pricing coordination with incomplete demand information
Authors: Lu, Y
Song, M 
Yang, Y
Keywords: incomplete demand information
inventory and pricing coordination
K-approximate convexity
Issue Date: 2016
Publisher: Wiley-Blackwell
Source: Production and operations management, 2016, v. 25, no. 4, p. 701-718 How to cite?
Journal: Production and operations management 
Abstract: In retailing operations, retailers face the challenge of incomplete demand information. We develop a new concept named K-approximate convexity, which is shown to be a generalization of K-convexity, to address this challenge. This idea is applied to obtain a base-stock list-price policy for the joint inventory and pricing control problem with incomplete demand information and even non-concave revenue function. A worst-case performance bound of the policy is established. In a numerical study where demand is driven from real sales data, we find that the average gap between the profits of our proposed policy and the optimal policy is 0.27%, and the maximum gap is 4.6%.
ISSN: 1059-1478
EISSN: 1937-5956
DOI: 10.1111/poms.12504
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